Looming U.S. Junk Bond Risk May Shrink With Fed’s Help
- Nearly a third of the market matures in next four years
- With rates low, companies are chipping away at that wall
The Marriner S. Eccles Federal Reserve building stands in Washington, D.C.
Photographer: Andrew Harrer/Bloomberg
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One of the biggest risks in the junk bond market is showing signs of diminishing, with help from the Federal Reserve.
Nearly a third of the $1.2 trillion U.S. high-yield market matures in the next four years, a record high proportion, according to Barclays Plc strategists led by Bradley Rogoff. Junk-rated companies have to refinance that debt, pay it off, or face bankruptcy.